That video was simply amazing. It's nice to see what developers can come up with when given such a nice foundation to develop on. I don't think such fully featured apps like this are going to work well on a little 7" tablet. If I were Apple, I would have apps like this all over my iPad commercials.
Edit: On second thought, if I were Apple I would just buy this company outright, make this a built in part of the iPod app, and integrate it with the iTunes DJ feature. This app could be positioned like how iMovie, GarageBand, and other iLife apps positioned for nonprofessionals to be able to do some nice creative things. I for one would love to throw a party at my house and try out the whole DJ thing. That would be cool. 😎